Ahead in the Count

Most Net Valuable Player

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Two weeks ago, I introduced the new version of our Market Value Over Replacement Player (MORP) statistic. In today’s article, I will discuss the “Most Net Valuable Players” of 2009 according to this metric. These are the players who provided far more than their salary and draft-pick compensation costs in 2009. Unsurprisingly, the majority of players atop this list will not be players with six or more years of service time necessary to become a free agent. Evan Longoria, for example, was one of the most net valuable players in the league last year because the Rays were not required to compete with other teams for his 2009 services. Albert Pujols, on the other hand, has enough service time that he could have been a free agent before 2009 had he elected, so the Cardinals were required to pay more for his services. Therefore, the first table below will only list the most valuable players who would have been free agents before 2009 if they were not already under contract.

For those players eligible for free agency, I computed the cost of their services as the average annual value of their contracts, adjusting for draft pick compensation surrendered at the beginning of a player’s contract by signing him and/or gained at the end of a player’s contract by offering him arbitration. For other players, I simply took the dollar value of their 2009 compensation plus the pro-rated signing bonus.

Pujols leads the list and it is not even close. His ridiculous 12.7-win performance in 2009 made him worth $62.6 million. Does that mean that Pujols could get $62.6 million per year in a free-agent contract? Fortunately for the Cardinals, the answer is no. Pujols was never a guarantee to put up that many wins, and he never had before. At the same time, if Pujols were to offer his services for only one year and were not offered arbitration, he might be able to get nearly $45 million for a one-year deal. Chances are that he will want many more years guaranteed when he does reach free agency after 2011, and as a result, may get closer to $35-40 million a year in my estimation.

One of the more interesting questions arises when we look at Roy Halladay in second place. The Blue Jays certainly got some extra fans to come to their games on days he pitched, but he did not generate $34.1 million in income for them. MORP approximates the market value of those services—if a large-market contending team had added Halladay, they probably would have generated about this much on average. However, Halladay was not this valuable to the team for which he played. Perhaps the player who was most valuable to his team might have been Mariano Rivera, whose Yankees generated the most revenue in 2009 as a result of their World Series championship. On the other hand, the Yankees probably would have made the playoffs at least as a wild-card team if not for Rivera, while the Cardinals would never have gotten to the playoffs without Pujols.

Ryan Franklin makes a pretty shocking third player on this list. Of course, this is based on his WARP3 numbers, which is an interesting case study in valuing both relievers and BABIP-lucky pitching performance. Franklin’s .235 BABIP with men on base and .167 BABIP in high-leverage situations certainly explain why his 2009 ERA of 1.92 was so much lower than his SIERA of 4.32. When we evaluate past performance here at BP, we credit a pitcher for his BABIP luck (net of his team’s BABIP skill) just as we do hitters who get a few extra bloopers to fall in. This is obviously a subjective methodological decision. In this case, it makes Franklin the third-most valuable player in 2009, though it says nothing about his ability to repeat this usefulness in 2010.

Some might be surprised that Orlando Hudson cost $18.5 million, considering his $3.4 million salary. This is one of the more shocking examples of how important it is to consider draft-pick compensation when evaluating the cost of a player. Hudson forced the Dodgers to surrender the 17th overall pick in the amateur draft to the Diamondbacks in 2009, but was not offered arbitration (albeit probably foolishly) by the Dodgers in 2010. The cost of surrendering such a high pick—the second-highest possible pick you can surrender (as the first 15 picks are protected) added a lot to his cost, with no draft picks recovered in 2010.

The next chart will show the value of players who have reached arbitration status, but have not yet reached free-agent eligibility. These are players who had no more than six years of service time going into 2009, but had at least achieved Super-Two status.

This group of players should have positive values, because the arbitration process in baseball restricts players from bargaining with other teams. In fact, the list of 25 players above does extremely well. No one could have expected Zack Greinke to put up 9.9 wins in 2009, but he did and the value of that is very high on the market. Fortunately, the Royals had him under team control through 2012. Joe Mauer was phenomenal in 2009, and managed to be so good in an injury-shortened season that even with his $10.5-million salary, he was more valuable than many cheaper players. He was probably the most net valuable player on this list to any team, as the Twins would certainly not have made the playoffs without him. The Phillies would have really struggled without Chase Utley too, of course.

Moving onto the players not yet eligible for arbitration, we get the list below. This group of players was allowed to be promoted at the league minimum by their team unless their contract said otherwise, and their teams were allowed to renew their contracts at their previous year’s salary if they did not agree to a deal. Without any real negotiating power, it’s not surprising how valuable this group of players was.

Unsurprisingly, the so-called best contract in baseball, Longoria’s agreement with the Rays, sits on top. Even as his service time escalates, his salary will not escalate nearly as much as other players, thanks a team-friendly deal he signed soon after reaching the big leagues. There are many other players on this list providing excellent value at a young age. These are some of the most valuable players in baseball.

Pujols takes the prize as the Most Net Valuable Player in baseball. What is most fascinating about this is that he makes $15.8 million per year during the 2007-10 seasons, the first four after he would have reached free agency if he had not signed a seven-year, $100-million contract with the Cardinals. To get a sense of how remarkable this is, notice that the second-most valuable player with six years of service time, Halladay, is 37th on this list. The 35 players between Pujols and Halladay do not have the right to negotiate with other teams. That is what happens when you generate 2.8 more wins than everyone else in the game.

If we had to pick an American League Most Net Valuable Player, it would probably be Greinke, though it would be Longoria if we only looked at hitters. Pujols would keep his National League Most Valuable Player crown with or without the word “Net” inserted in. If we were to butcher some language a little bit and invent the “American League Net Cy Young” and “National League Net Cy Young,” we would actually get the same players as well with Tim Lincecum winning in the NL. This is actually not as surprising as one might think, given the number of players in baseball who are not yet eligible for free agency. In fact, two-thirds of all WARP3 over the past few years has been produced by players not yet be eligible for free agency.

It should also be clear from this list how much the labor agreement in Major League Baseball affects the talent distribution. When critics talk about the need for a salary cap, they should also keep in mind how much teams are able to compete with players who have not yet reached free agency. The Marlins have made a business model out of this. Players like Greinke, Adrian Gonzalez, and Longoria slot in right below Pujols on this list, which is particularly notable since all three players are under the control of small-market franchises. Young talent is essential to building a valuable team since paying market value for all your WARP3 would almost certainly bankrupt even the Yankees.

The Yankees were the only 2009 playoff team without at least one player in the top-40 most valuable players in baseball, and they definitely had some good value from players on the other lists above. Getting good value is essential to building a good team.

Matt Swartz is an author of Baseball Prospectus. Click here to see Matt's other articles.
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The WARP3 numbers are somewhat of a methodological difference from fWAR. WARP3 has a lower replacement level than fWAR (~1250 WARP3 vs. 1000 fWAR, 49-win vs. 40-win replacement level). That's probably a judgment call in that range. I'm not sure how big the replacement level error bars should be.

As far as the free agents, I don't have my numbers in front of me but I'm pretty sure it was 383 WARP3 for about $1.88 billion, but that could be +/- .03 billion. The net (MORP-Salary) sum total was 0 by definition.

Using my service-time contracts and wins articles, I can see it was about 403 WARP3 for arb-level guys, and min-salary guys had 445 WARP3.

I think the total salary compensation for the league was something like $2.8 billion, which would be $2.5 billion above the league minimum. So it's about $630MM for arb-level players above the league minimum; so about $1.6MM/win.

1) Draft pick compensation-- it was 12% of all free agent compensation in 2009, I think; 16% and 15% for '07 and '08, if I remember correctly. That number is based on discounting future wins at 8% per year, so it could be higher or lower depending on that.

2) Using all years of a contract, rather than just the first years. The market moves throughout the off-season and before. No one knows the exact marginal revenue, but they try to pin it years in advance, not just the off-season in advance. So when a two-year contract is signed in Feb '08, it matters for average salaries in '09 even if it wasn't in the 5-month window before '09. I had an analogy to BLS employment numbers in my previous article, and how you can't look at wages only of new job-finders to find average wage levels.

3) Using production vs. projection. Projected free agent production is about 15% higher than actual production, according to PECOTA and CHONE (CHONE is according to Sean Smith/Rally, I only did the PECOTA test and confirmed the same bias). I had an article a couple weeks ago about how players who reach free agency are a biased sample of all players so they shouldn't really be up to par with comptuer projections that don't know the information contained in the economic decisions of their teams.

Actually-- it wasn't $1.88 billion for free agents. It was $1.69 billion for 383 wins, plus the draft pick compensation, which made it $1.63 billion for 337 wins (subtracted out bonuses and the discounted win values of the draft picks last).

That would leave about $810MM for arb-level players about, so that would be almost exactly $2.0MM/win for them.

Thanks for the article; I am really enjoying the new MORP. I am not sure I agree with you on this point, though. It seems like every team has an avenue to cheap talent, not just small market teams. The impetus for a salary cap would be make free agent talent, which is currently almost monopolized by the larger market teams, available to smaller clubs.

A better term might be "Most Profitable Player". Profit, rather than value, is also a term that usually (but not always) refers to current results. "Value" (although not as in MVP)implies future returns - who's worth the most net of contract going forward. The most profitable company doesn't always have the highest or fastest growing stock price.

Well, that's mostly because he got paid $14MM less. Rivera had quite a whole to cover there. I think Rivera outperformed his contract last year, but not as much as Counsell. The reason Counsell comes out looking so good is that he was a borderline replacement level player who suddenly had his SLG jump 100 points while his AVG spiked 60 points. When you get an above average middle infielder for free, that's really good. Rivera was paid like an elite closer and performed like a super-elite closer.

I'm with Jay Taylor. Who are the players on whom teams have wasted the largest chunks of their payrolls? (I'd limit this to players whose performance was not clearly derailed by injury, by the way.)

I feel like mentioning that, on the lists Matt has provided us, most of the "most profitable" players are those whose mobility is limited, the lists of the "least valuable" would be those about whom management meade the biggest mistakes in avaluating performnce.

Since you have draft pick compensation accounted for, is there any way you can have trade compensation accounted for? I see Casey Blake and Orlando Hudson on the list and while I understand a cost in giving up a first round pick for O-Dawg there is no calculation for giving up a top prospect for Blake. Can prospects be given a cost in the same way (i.e. top 20 ranked hitting prospects are worth x amount, top 75 rated pitching prospects y, non top 100 pitching prospect some different amount)?

Blake was acquired in July 2008 at the end of his contract with the Indians. He was granted free agency after the year, but re-signed with the Dodgers.

I agree the trade market could shine some light on how players are valued, but that is not something that could be modeled in the free agent market. I've seen some models of trade valuation, but there is room for improvement. Mid-season trades have different methods of valuation because MORP isn't linear through the year. Wins are more valuable at the beginning to teams who don't find themselves at pennant races in the end, and more valuable at the end to teams who find themselves in pennant races in the end. If teams knew how close their races would be, MORP would be uniform through the season, but since they don't, it's not. Trade value gets really complicated for that reason.